Friday, September 4, 2015

Hayek's Confusion

During a recent discussion with David Gordon, I brought up the famous interview (in Hayek on Hayek part1) where F.A. Hayek stated that he was surprised that Ludwig von Mises never objected to his 1937 paper, Economics and Knowledge (Chapter 2 in Individualism and Economic Order). I remarked to David, who studied under Hayek, that I thought Hayek was confused and that Mises never criticized Hayek about the paper because Hayek's view, as detailed in the paper, was not different from the view of Mises.

In earlier studies, Caldwell has been much preoccupied with the a priorism of Mises; so it comes as no surprise, then, that he devotes attention to Hayek’s famous article of 1937, "Economics and Knowledge." Hayek later identified a covert theme in this article, his break with Mises over the a priori. Caldwell, a strong opponent of Mises’s method, argues that Hayek had even before his article distanced himself from Mises.3

Hayek in his article restricted the sphere of a priori knowledge to the actions of single individuals. Interpersonal actions cannot be studied without resort to the empirical, because a person cannot know a priori the choices of others. But where did Mises ever say that one can? Mises’s praxeology is confined entirely to the form of human action and what follows from this: it never attempts to deduce the particular choices of individuals. Mises, I suggest, was entirely on target in thinking that Hayek had not broken with him. Hayek’s belief to the contrary rested on misunderstanding.

Hayek noted with surprise that Mises "took my critique silently and even approved the article as if he had not been aware that it was a criticism of his own views. I cannot explain this" (p. 221, quoting Hayek). Why did Hayek think that Mises denied that "the empirical element enters in people learning about what the other people do" (p. 221, quoting Hayek)?

Empiricism and rationalism are unreconcileable. I have not been impressed with Hayek. It seems like all the moderate classical liberals, like those at Cato and Mercatus, are Hayekians. Voucher schools guys? C'mon.